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Many taxpayers find that they have the obligation, but not the financial means, to pay their full tax bill to the IRS (Internal Revenue Service). Fortunately, if the circumstances allow it, the IRS could work with those individuals or businesses to reach a payment plan that allows the taxpayer to meet these obligations over time instead of utilizing more strict collection actions.
These payment plans are known as installment agreements. While these agreements can be beneficial, they are not an option for everyone. A seasoned IRS collection attorney could advise you if this type of plan is in your best interest. With the guidance of a Washington DC IRS installment agreement lawyer, you could secure the financial relief that you need. Further information on these agreements is available on the IRS website.
An installment agreement is a plan entered into between the IRS and a taxpayer to resolve the taxpayer’s tax debt. Technically, any delinquent tax debt is due immediately. An installment agreement allows a taxpayer to pay their obligation in a way that better fits with their budget and their ability to pay. This usually means smaller installments are paid monthly, or at some other interval that the IRS agrees to.
The major benefit when it comes to taxpayers using installment agreements is the potential for avoiding liens or other risky collection actions. As long as a taxpayer stays current on their agreement, the IRS will not pursue collection actions that could put the taxpayer in a financial bind.
Installment agreements are only one of the ways a taxpayer could take care of their obligation to the IRS. There are other options that could allow someone to resolve their debt for less than the full amount they owe. A Washington DC attorney could provide insight into whether an installment agreement with the IRS is even the best option available to a taxpayer.
Not all installment agreements function the same way. There are different options available to taxpayers depending on their specific financial situation and choosing the right option requires a deeper analysis. Thankfully, a Washington DC installment agreement attorney could perform this analysis and submit the agreement to the IRS to reach a fair outcome.
A guaranteed installment agreement is only available for taxpayers with a limited amount of debt. This option allows a taxpayer that owes less than $10,000 to the IRS to pay what it is owed over a period that usually lasts 36 months. This $10,000 limit only applies to the tax debt itself and not any fees or interest that has accrued. For smaller debts like this, the aid of an attorney is usually not necessary.
Streamlined installment agreements are available to a taxpayer who owes less than $50,000 or business that owes less than $25,000. Streamlined installment agreements do not require verification of a taxpayers’ assets, liabilities, income, or expenses. As long as a taxpayer in one of those two brackets can pay in full within 72 months, the IRS might agree not to pursue a tax lien.
An in-business trust fund express installment agreement is an option for a small business owner with employees. This option is available when the tax owed is $25,000 or less. However, payment in full must be made within two years. This option is beneficial in some instances because there is no requirement for a financial statement or verification.
If the IRS is trying to collect on owed taxes but you currently do not have the means to pay in full, an installment agreement could be your best option. If the IRS signs off on this approach, you could avoid any liens or other collection efforts. If your tax bill is especially large, it is best to proceed carefully with your proposal. Call a Washington DC IRS installment agreement lawyer to schedule a consultation.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.
